KUALA LUMPUR, Aug 3 ― A PKR MP today demanded Putrajaya to reveal its calculations on the collection rates from both employers and employees under the newly proposed Employment Insurance System (EIS).
Kelana Jaya MP Wong Chen claimed Putrajaya's annual collection once the Bill is gazetted as law would run into nearly RM2 billion, which he said is way above the amount needed to insure retrenched workers.
Wong said based on the estimate of average proposed payout at RM1,000, the annual payout to 50,000 retrenched workers for maximum of six months would only reach RM300 million.
He based his number of retrenched workers for 2016 on the Malaysian Employers Federation’s (MEF) report of 44,000 affected workers in 2015.
“This Bill however, calls for RM2 billion on annual contributions, but then pays out an estimated RM300 million. This is is massive 6.7 times differential in contributions to payouts,” Wong told reporters in the Dewan Rakyat here
He said a reasonable collection rate would merely be three-fold at maximum, and making both bosses and workers to pay up an additional RM1.1 billion a year would be akin to taxation.
“There is a massive disconnect between the contribution and the payout. When there is a massive disconnect this must be viewed as a tax. This is essentially a tax,” he said.
Wong also questioned whether the EIS is a way for Putrajaya to supplement its dire cashflow.
“If the government does not disclose the numbers properly and we rush into this and debate it, it will end up with more workers paying a lot more for insurance that they don't have to. Remember, this also affects the employers, as they have to pay half.
“My recommendation is to collect up to RM900 million a year, because they have to pay out RM300 million. In case the economy collapses totally and 150,000 people are out of jobs, then it can at least cover for that,” Wong added.
Under the new Bill, both employers and employees would have to contribute to the EIS fund, starting from 10 sen each for monthly wages not more than RM30, and RM19.75 respectively for both parties, for those with monthly wages more than RM4,000.
MEF executive director Datuk Shamsuddin Bardan had yesterday also questioned the rationale of collecting an estimated RM1.6 billion annually for the EIS.